RIP Fiscal Prudence

When Prime Minister Justin Trudeau’s Liberals ran on a platform of deficit spending in the last federal election, many pundits wondered aloud whether the public would go for it. The Conservatives, in spite of having just inched their way back to balance after six consecutive deficits, were promising to keep the books in the black.

Even the NDP which, for the first time, entered a federal election on more or less equal footing with the other main parties, had committed to keeping budgets balanced.

For years, going back to the Chretien/Martin Liberals, an implicit consensus had been in place. Balanced budgets, or at least promising them, was the baseline of fiscal maturity that Canadian voters expected of those seeking to run the country.

On the surface, the old consensus appeared to be dead. Maybe voters didn’t care about deficits after all? RIP, fiscal prudence, we hardly knew ye.

For the fiscal hawks among us, a party winning an election on a promise to run deficits was certainly troubling. But a new poll from Angus Reid suggests that reports of the death of deficits as a political liability may have been greatly exaggerated. In fact, a resurrection of sorts is underway, when it comes to the public’s concerns about runaway government spending.

While partisans will focus on the horse race numbers, what’s striking is how economic and fiscal matters are top of mind for most Canadians. The economy was listed as the second most important issue for 26 per cent. And at 29 per cent, “the deficit/government spending” is now Canadians’ number one concern, more than double the 12% who said so just two years ago.

As the national debt has risen, concern for the deficit has risen, and Liberal poll numbers have slumped.

Correlation might not mean causation, but this trend should at least be enough to get politicians to sit up and take notice.

These numbers suggest that Canadians aren’t indifferent to deficit spending after all. Maybe, just maybe, voters took the Liberals at their word; just a couple tiny deficits before we’re back in the black. They are, however, none too thrilled about the Liberals’ decision to run much bigger deficits in perpetuity.

Perhaps that tolerance for small, temporary deficits, still more than some of us would like, should not have been taken as a license to throw all fiscal prudence out the window. And, maybe, the shifting justifications for more spending aren’t helping.

First, the argument was to stimulate a slow economy. Then, it was to spend on “infrastructure,” much of which was actually just regular spending.

Fast forward to today, and the latest justification for deficits is apparently to promote gender equality.

In other words, when the economy was weak, the Liberals claimed they had to run deficits to boost it. But, once the economy improved, it switched to arguing they should run them simply because they wanted to.

Canadians know that math doesn’t add up.

Even those voters comfortable with deficits in bad times expect it to be made up in the good times. And they know living beyond our means comes at a price; a price that rises the longer we refuse to pay it.

The result of this recklessness is that the party that could once credibly claim strong fiscal bona fides, the party of Paul Martin, deficit slaying finance minister, has seen its economic credentials steadily erode since coming into office.

There’s a year and a half and one more budget before the next election. One more chance for this government to show it can right the fiscal ship. It may want to start thinking hard about how to do it.

If it doesn’t, voters may exact their revenge accordingly.

Aaron Wudrick is the federal director of the Canadian Taxpayers Federation. The CTF is Canada’s leading non-partisan citizens’ advocacy group fighting for lower taxes, less waste, and accountable government. This column originally appeared in the Toronto Sun